Transportation

Road and rail make a connection

Siyabonga Gama CEO of Transnet Freight Rail plans to expand its operations and contributing to the economy in a sustainable manner.

According to him, "The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-Saharan region, with its rail infrastructure representing about 80% of Africa's total and operates in six business units: agriculture and bulk liquids; coal; container and automotive; iron ore and manganese, steel and cement; and mineral mining and chrome."

Transnet Freight Rail has a strong and proud reputation for technological leadership beyond Africa as well as within Africa, where it is active in 17 countries. Transnet Freight Rail has positioned itself to become a profitable and sustainable freight railway business, assisting in driving the competitiveness of the South African economy.

Africa as a whole is currently a hub for accelerated growth and development and the role that TFR plays especially within the SADC region, is vital for its success. We have a powerful rail link and our aim especially in Africa is to create a seamless flow from point to port, almost as if there are no borders.

The market Demand Strategy mandates us to perform to satisfy the customer and fulfil the country’s economic needs and this affects Africa as well. We have through our International Business Unit (which aims to grow Transnet Freight Rail’s activities in the neighbouring countries and identify new markets in an effort to extend the company’s operational footprint) formed the Joint Operating Centres (JOCs).

JOCs are a facility and centre for rail and port information sharing. They are set up in Botswana, Mozambique, Swaziland and Zimbabwe in partnership with the respective countries and the railways. We have trains running already in Malapye Botswana, from the coal mines straight to the ports in Durban.

This single touch point is significant for cross border planning and execution thus driving improved efficiency and will be essential in the co-planning of operational execution of trains from borders to ports in the three countries and the rest of Africa.

There is also an international business component, which is an interface between TFR, Ports and SADC railways. It co-ordinates and grows TFR's activities in the neighbouring states and identifies new markets in an effort to extend the company’s operational footprint.

TFR is a freight rail company and in as much as we have a unique service offering in our economy and in the country this cannot be done in isolation. Road vs Rail has been a topic of discussion for the longest time but this has been reinvented to Road and Rail collaboration. This is a strategic and mutually beneficial partnership between TFR and other transport logistics company’s exist in order to achieve the objective of moving rail friendly traffic from road to rail, creating an end-to-end logistics solution to our customers thus lowering cost of doing business and moving freight. All in the effort to achieve the Market Demand Strategy and ultimately growing the South African economy.

We have signed a Memorandas of Understanding with logistics giants like Imperial Logistics and Barloworld Logistics which is the first step in achieving these objectives. The partnerships are aimed at allowing these companies’ to offer their customers, as well as allow TFR, an end-to-end logistics solution. As partners in trying to move the South African economy forward, we will rely on each other to integrate with the other in their various fields of expertise. The aim is not to compete with road or take jobs away but rather simplify the way of doing business in the South African transport logistics sector. Moreover, this will filter over into the rest of the countries which form part of the SADC region and ultimately, the rest of Africa.

The Agriculture and Bulk Liquids (ABL) business unit

The main objectives of ABL are to achieve volume growth, shift appropriate volumes from road to rail, reduce costs and harness market opportunities. The Business Unit is the most geographically dispersed BU, with depots extending from Durban and Pietermaritzburg to Pretoria and Sentrarand in the north; Bethlehem, Kroonstad, Bloemfontein in the Free State as well as East London, Worcester and Bellville in the Western Cape.

Factors such as opening up of international markets for export maize; local grain prices which will dictate imports, exports and grain demand in the southern African region might impact the future performance of this sector and Business Unit. The market objectives are to try and recapture some of the lost market share over the next few years. This will go hand in hand with TFR’s efficiency improvements, implementation of the Grain Model, volume ramp up and more reliable service. We are looking at increasing tonnages transported with at least 5% per year over the next four years. FMCG consists of frequently purchased products such as food, beverages, household products and general merchandise. The market is very volatile with new commodities and brands launched frequently. The ABL BU transports mainly sugarcane, refined sugar products, beer and barley in this portfolio.